The average capital balances of partners Bridget and Emily are $5,000 and $15,000,respectively.Bridget and Emily work full time in the business.The business earned net income of $12,000 for the period.The partners have agreed to share earnings based upon the percentage of original investment.Bridget's share of the net income is:

Question

Quizplus · Accepted Answer

The total original investment is $20,000 ($5,000 + $15,000). Bridget's percentage of the total original investment is 25% ($5,000/$20,000) and Emily's percentage is 75% ($15,000/$20,000). Therefore, Bridget's share of the net income is 25% of $12,000 which is $3,000.

The Average Capital Balances of Partners Bridget and Emily Are